This morning, the New York Times picked up on the meme, with a story asserting that – surprise! – service on the AT&T network has been badly degraded by the heavy burden placed on the system by those data-hungry iPhones. “The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand,” the Times wrote. “Another result is outraged customers.”

Update: A spokesman for AT&T wrote in to refer me to a follow-up item the Times posted on its Bits blog, which quotes an exec with network monitoring firm Keynote Systems as saying AT&T’s network isn’t actually suffering any trouble related to heavy iPhone usage. The Keynote guy noted, though, that the carrier’s worst performing markets were Manhanttan and Los Angeles. The AT&T spokesman asserts that the Times’ original story “provided an inaccurate view of our overall network quality and customer experience.” Oh, I dunno. Service quality here in Silicon Valley is far from relilable; dropped calls, poor signal quality and slow data service is often an issue. I had better quality service over the summer from Cellcom in Israel than I get here in Palo Alto. So to suggest AT&T does not have service issues simply doesn’t jive with my personal experience.

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There are 35 comments

SEPTEMBER 3, 2009 10:15 A.M.

Mike wrote:

Self-Promotion harg at work!

SEPTEMBER 3, 2009 10:34 A.M.

Derek A. wrote:

You think its bad now, wait until you have more Netbooks and Laptop aircards (which use like 10x the bandwidth per month vs. iPhone and 30x vs. Blackberries) in the customer mix. I think AT&T has a strategic advantage over VZW in that they've been investing heavily in WiFi hotspots (bought Wayport, have agreement with SBUX) so at least have a way to alleviate network pressure. Also, VZW is hardly some network quality nirvana, there's no reason to think they wouldn't have the same issues that AT&T does with the same customer mix.

SEPTEMBER 3, 2009 10:53 A.M.

Michael A. wrote:

Economics and history will eventually push the iPhone into open territory, however the only question is when? Exclusivities work only for short periods when a technology is unique and superior and the case for the iPhone FITTED this mold. When the iPhone was released 30 months ago it truly had no competition, however that is very different today, regardless of the number of Applications they have garnered over the years. The competition from Google and Palm is now running neck and neck with the iPhone and I wouldn't be hard pressed to see Palm eventually trouncing the iPhone, nor would I be surprised to see Google's Android based phones take the leadership in the Smart phone wars. Apple's decision at this juncture on whether to continue being tethered to one carrier will have profound effects on the iPhone's future. Today Apple's superior OS has already been trounced by Palm's WebOS and emulated by Google's Android, On the Hardware side the technology is basically outsourced, meaning it is no more than a commodity. The CPU, Battery, lenses, future AM OLED screens, memory and speakers etc are all commodities that any manufacturer can purchase. The only difference between Smartphones is their OS and design and as I have said Palm's Web OS and the Android based phones have already emulated the iPhone's OS. At this moment the only thing the iPhone has going for it is Applications, however that is only because they came to market 30 months before their competition and only a fool would expect this advantage to last more than a year. Apple would be wise to flood the market, in a similar manner like Blackberry while they hold the trump cards. If would have a better chance of stunting Palm and the future Android based phones. By tethering itself to ATT it is giving the competition plenty of breathing room which could eventually stunt it growth.

SEPTEMBER 3, 2009 11:20 A.M.

Ringo wrote:

Sprint Wimax will have a ubiquitous 4G platform within six months and if download speed are important to your needs the obvious choice for the next two years should be Sprint. At $99/month their Simply Everything Plan kills VZ and ATT. As of today Sprint is offering 4G in Porland, Baltimore, Atlanta, Las Vegas, Boise, Bellingham and 10 cities in Texas. Now that their deployment of 4G is in full swing they will have most of their market covered before their year ends, however they will be in NY, San Fransisco, DC, Seattle and numerous other cities within 9 months. Sprint for once has finally started offering a good selection of Smartphones; Palm Pre, Blackberry Tour and a few Android based phones from HTC and Motorola. Put these phones on a 4G platform and the iPhone will surley regret its exclusivity with ATT.

SEPTEMBER 3, 2009 11:25 A.M.

rocco wrote:

@Michael A
...."Google and Palm is now running neck and neck with the iPhone" ???
I don't know which alternate reality you live in, but in the real world they are anything but "neck and neck" ... lol.
Palm is having trouble selling their phone. The sales are slowing at an alarming rate and analysts think that they'll have sold only around 600 K units by year end. The iphone 3GS is expected to sell 9-10 million by year end. Android is such an afterthought that nobody even cares. Apart from geeks nobody even knows about it. You sir, are extremely deluded if you think the "pre" is going to trounce the iphone.

SEPTEMBER 3, 2009 11:31 A.M.

rocco wrote:

Talking about Android .......

"Sprint will sell the new HTC Hero with 2GB of memory for $179 after a terribly annoying $100 mail-in rebate, the company announced today. Over at T-Mobile, the new MyTouch 3G costs $199 and the year-old G1 costs $149.

Hello! The 8 GB iPhone 3G is $99 without a rebate. The new 16 GB iPhone 3GS is $199 without a rebate. Any wonder that the iPhone is cleaning your clocks in sales?"

Ha Ha ... maybe Michael A can go get a 2GB HTC Hero and help android take leadership in the smartphone wars.

SEPTEMBER 3, 2009 11:32 A.M.

Nigel wrote:

While ATT & VZ lure customers with initial price and a coctail of confusing plans, Sprint is more forthright in their Wireless Plans. After doing a careful study of the four major carriers, Sprint was my choice for the best value for your purse. Other than the initial purchase or gimmicks offered by ATT & VZ, Sprint offers a substantial savings of $1200 on their all you can use plans over the course of a two year contract. What I also like about Sprint is that they have already rolled out their 4G platform, which is at least 4x faster than any other platform in the USA. ATT will not have a 4G platform for at least another 2 years and VZ will begin rolling out their Beta version of 4G in 2010, however don't expect this to be all encompassing for at least two years. Sprint's 4G will be present in most of America's metro areas within six months.

SEPTEMBER 3, 2009 11:34 A.M.

JP wrote:

Don't get your panties in a bunch Rocco. He had a valid point. You most likely have not touched the Palm Pre, so you should keep your condescending mouth shut. Face it, AT&T has a crappy network and will never match up to Verizon or Sprint's. Wimax is where it is at. I am excited to see Sprint come back with yet another first in the wireless industry. I tested it out in the Portland market and I am very excited to see new devices which will be Wimax compatible.

SEPTEMBER 3, 2009 11:39 A.M.

Michael A. wrote:

@rocco, yes the iPhone is cheaper for those of us who don't have a 3rd grade math background but over the course of the two year contract it is Substantially more expensive. The Pre costs $199 while the iPhone 3GS cost $199, however over the course of a two year contract the iPhone will cost your at least $1,200 more than the Pre on a 'Simply Everything' Plan. Essentially an iPhone GS is being sold for $1,200 more than a Pre.

SEPTEMBER 3, 2009 11:42 A.M.

Ron wrote:

The obvious answer is through pricing. What would be the incentive to install energy saving air conditioners or refrigerators if we paid a flat rate for electricity? Likewise those who clog up the network should pay for it.

SEPTEMBER 3, 2009 11:42 A.M.

Ron wrote:

The obvious answer is through pricing. What would be the incentive to install energy saving air conditioners or refrigerators if we paid a flat rate for electricity? Likewise those who clog up the network should pay for it.

SEPTEMBER 3, 2009 11:47 A.M.

Michael A wrote:

As I have said, the Pre and Android based phones are infants compared to the iPhone. Their OS according to the Developers can easily emulate the iPhones OS and it will take a few more quarters for them to truly manifest their advantages. Only a fool who has used these phones would walk away and conclude the iPhones superiority. As I have indicated the iPhone was king 30 months ago however today that is far from the truth. Having captured market share does not indicate superiority, if that was the case Blackberries would be bette Smartphones that the iPhone. What I am refering to is the phone not how much market share any of these phones have garnered. You can not compare a phone that was just released in a crowded market with a phone that was released 30 months ago without any competition.

SEPTEMBER 3, 2009 12:12 P.M.

scurvy wrote:

You're blaming Apple again for AT&T's incompetence? LOL. Good one Eric. It's AT&T's fault that they dropped the ball when handed the deal of a lifetime. They were fat, lazy, and stupid; wanting to suck down profits at the expense of customer service and quality. Once they lose exclusivity, want to wager as to how many customers they lose?

SEPTEMBER 3, 2009 12:25 P.M.

james fltech wrote:

Some of you are truly diluted thinking WiMax is where its at - wrong- the fastest network today is ATT and with the upgrade to be comleted shortly speeds of 7.5 Mbps will certianly help. As for 4G any carrier is still years away and most of you geeks never heard of ROI (return on investment), no carrier is going to expand faster than what cost it lays out to build the network. Let VZ join the party for Iphone I would love to see all you that trash ATT see how taxed there network would be considering that CANNOT increase the current speeds because of there platform being pushed to limits.

SEPTEMBER 3, 2009 12:26 P.M.

Chester wrote:

I've been hearing about ATT / iphone issues for a couple of years... but I've never had any issues with dropped calls or lack of coverage. And now that I have a 3GS, my internet access and performance is great. The problems are probably greater in large urban areas, but I just wanted to chime in to say that the ATT problems with iPhone are not universal.

SEPTEMBER 3, 2009 12:53 P.M.

Uncle Bernie wrote:

ATT sucks and this has brought them to their knees. woefully unprepared, there are fewer bars in more places.

SEPTEMBER 3, 2009 1:35 P.M.

Reachozzy wrote:

WTF!! You people are talkin about the iPhone will never go to a CDMA network it's not worth it.There's no $ in a little market Like that. If AT&T is so bad why T F would bberry be on that network Nokia sam etc. Y didn't apple go with VZW in 07 remember the 2g came out!!!! Every talked so much shit about that iPhone nobody want anything to do with that phone. Now that's it so hot of an item that it's AT&T fault that it's doesn't work good enough for some people but I have no problem but the battery that's it. As far as network man alot better then a few networks that I've been on UH!! But like my haters tell me ur only one person what can you do...!!!

SEPTEMBER 3, 2009 2:33 P.M.

Anonymous wrote:

The key to solving this issue to true network interoperability, similar to number portability. Remember back to those days when you were a customer with carrier A and had to leave your number with that carrier if you wanted to change. We need to be able to buy a phone and go to any network with it, instead of carriers trying to hold you hostage to their sometimes questionable or outrageous service. One example is SMS - since when did sending ~250 characters of text become so expensive? $0.10 a message!

All that to say - AT&T's 3G network in the Dallas/Fort Worth & NYC areas using a Blackberry Bold has been unreliable, in my opinion. To say that there are no issues, or have been limited issues, either originates from someone who is a liar, is ignorant, or uses some metric that has little value to their end-user.

SEPTEMBER 3, 2009 2:47 P.M.

jmmx wrote:

It seems to me that the really-smart-smartphone revolution kicked off by the iPhone is just taking hold. The obvious result of this is that users are using them.... well, as real smartphone - i.e. they are using the data connections. (Like duhhhh) Well, probably using it a lot more than people anticipated.

In any case, there is a strain on the networks. As more users come onto Verizon and Sprint, I imagine that they will also fee the strain. It seems to me that users are ramping up (buying) much quicker than the telcoms can keep up.

I am sure that iPhone will go to other carriers as soon as it can. Probably to 4G soon enough as well. Then we will see what happens.

SEPTEMBER 3, 2009 3:01 P.M.

Trav wrote:

Question here:

1) AT&T claims iPhones are not metered and not restricted in any way.
2) AT&T also claims that their service is "bring brought to it's knees" by iPhone.
3) AT&T iPhone customers in heavily populated network areas are the ones having connectivity problems.
4) AT&T customers who do not have an iPhone are not reporting anywhere near the level of these kinds of problems.

If all of the above is true, why this report of the network undergoing undue strain? Why not make AT&T own up to the fact that the iPhone clearly doesn't have access to the full pipe the network is on. Other devices are clearly being routed or unmetered by comparison. If the iPhone is the actual problem -- as in "The problem is WITHIN the iPhone in how it communicates with our network", then say that, or have a 3rd party say if i AT&T can't, but I'm sick of AT&T whining that they don't have the network or the resources to support this, because clearly they do.

SEPTEMBER 3, 2009 3:39 P.M.

makelvin wrote:

There seems to be many arguments here about iPhone's OS vs Palm Pre and Android OSes. I can tell you from a developer's perspective after looking into all of their SDKs that iPhone's SDK is the most matured development environment follow by Android with Palm's WebOS SDK feeling like it is rushed out the door.

Palm's WebOS basically uses Javascript for all of their development. It might seem like an advantage considering a lot of web developer can almost instantly develop application for it. But Javascript does not have any 3D graphic object library and Palm does not provide one with their SDK so it order to develop any sophisticated 3D games or programs, you will have to do all of that yourself in Javascript. To make matter worst is that Javascript is basically an interpreted language that simply cannot compare the performance of native code binary programs that iPhone can generate with Objective-C. So as a result, even if the developer decided to do the 3D code themselves, the performance would most likely be terrible. I don't think anyone should expect a lot of 3D games or programs for the Palm Pre to come out anytime soon.

The lack of 3D library is only one aspect of the SDK that seem prematured. There are also a lot of other things such as poor online documentation and Palm's Pre simulator does not emulate a lot of functions of the real device that would also contribute to very slow APP developer adoption of this platform.

The Android mainly uses Java for its app development. For the most part, it is quite complete. It provides good documentation and OpenGL ES for 3D graphics. But it's development environment simply does not seem quite as tightly integrated as Apple iPhone's SDK complete with graphical layout and development tool. The fact that it uses Java instead of native code will probably mean that its performance will suffer a bit compared with iPhone. But its use of Java also means that the developers can develop Android apps on virtually any platforms.

iPhone's clearly dominance in their App Store is not by chance or coincidence. Their SDK is top notched development environment that provides good support on virtually every aspect of their phones with nice clean animation support, 3D graphics, sound, network, bluetooth and their famous touch interface. This allows more developers to spend less time to develop more higher quality applications that attracts more users. More users get the iPhone because of the high quality apps which further justify the app developers to continue developing iPhone apps due to the increasing market size. This creates a complete self feedback loop that continues to grow exponentially. This is not something that any of their competitors can or should ignore.

The way I see it; Android got a shot to break iPhone's App Store momentum; but as it stands now, Palm's got a long way to go before they will have a chance in challenging Apple iPhone.

SEPTEMBER 3, 2009 4:02 P.M.

Anonymous wrote:

Eric, your "update" is inteersting to read. Glad you're skeptical of the AT&T pitch. But that angle was tehere all along. The Times article shows 2 views: that iphone AT&T didnt estimate the volume that the iphone would place on its network. But also that the resultant poor service & perfomance is utlimately going to cost Apple dearly: " a recent survey by Pricegrabber.com found that 34 percent of respondents pinpointed AT&T as the primary reason for not buying an iPhone. "
Apple made a huge mistake in giving AT&T exclusivity. The sooner they open the phone to other networks, the better off everyone -- consumers, networks, and service providers -- will be.

SEPTEMBER 3, 2009 4:07 P.M.

VZW wrote:

I can really tell you Sprint 4G people have NO idea what you are talking about. Verizon is READY to launch 4G LTE in Boston and Seattle as we speak and will be out in December. Sprint has very little licens for 4G WiMax, and Verizon will have the WHOLE US covered in 2-3 years. Then, we will start to shut down CDMA 2000 (like Analog) and Sprint will be left in the dark with little roaming partners.

No one really knows this, but EVERY WIRELESS NETWORK IN THE US (excepts Nextel/iDEN) depends on Verizon for service. With Alltels GSM network, Unicels GSM, our wide coverage with CDMA, everyone GSM and CDMA network depends on us for roaming.

Sprint won't be around much longer. WiMax was a huge mistake. LTE is in.

And you think Sprint has a good line up? Wait till fall-winter. We have a HTC Android device coming, a motorola Android device coming, 2 new blackberrys, Omnia 2, HTC Whitestone, and many more.

SEPTEMBER 3, 2009 4:52 P.M.

Bruce wrote:

Have had iPhone for six weeks now in Las Vegas. What are you all talking about? I've downloaded 152 apps with ZERO problems. Have had ZERO network problems. Have had exactly TWO dropped calls, way less than my Razr for the same period. Internet access is so good that some days I don't even turn on my laptop. I played with the Palm, Blackberry, LG, etc. for days before deciding on an iPhone. It was years ahead in ease of use and capability. Most of the comments posted here all are arguments about vaporware. I'm using capability NOW. While you are arguing about 4G, blah, blah, yadda, yadda, I'm happily surfing the net 2-3 hours a day ANYWHERE I go. Keep up the discussion while more iPhones continue to be sold. You people need to get out of your cubicles!

SEPTEMBER 3, 2009 8:03 P.M.

Marvelouss wrote:

Wake me when the mindless chatter is over.

SEPTEMBER 4, 2009 4:46 A.M.

aapladay wrote:

Wow! A new look to Barron's and intelligent comments for once from all points of view! Hell is freezing ove.... no wait, not yet... Eric has not bowed down to ATT and Apple yet =P
Thanks for all your great opinions. I want to buy Sprint, but I just don't think they are there quite yet. I will be keeping my eye on them though.

SEPTEMBER 4, 2009 12:07 P.M.

Paul wrote:

I just recently switch from an ATT data card to Sprint to have access to their 4G network in Vegas and I have to tell you it is unbelievable. Owing to this I have decided to stop paying for Broadband via cable access. I don't care which company I subscribe to, all I care about is to have acccess to a fast and reliable wireless network source. In Vegas at this moment no one beats Sprint's 4G Wimax, when they do and if need be I will make the switch. Who cares about ATT, Sprint, VZ or T-Mobile? All most of us care about is good high speed connections at a reasonable price. For the time being Sprint has trumped the rest of the pact. If you are a fan, investor or employee of any of these firms I understand your envy but that will do you no good. What you need to do is deploy your 4G networks rather than cry about how horrible Sprint is because they trumped you into deploying 4G before you did.

SEPTEMBER 4, 2009 12:11 P.M.

Bill wrote:

Well put. I like you have done exactly the same thing except that I live in Atlanta. What we want is broadband speeds, the more the merrier and we don't give a hoot which company facilitates it. Sprint will do for the time being.

SEPTEMBER 4, 2009 2:26 P.M.

iphone user wrote:

I just moved up from LA and cannot believe how terrible the service is in Silicon Valley and SF. I drop calls ~10 times per day on the 280 and can almost never get enough data to pull up maps. Can't believe I'm paying so much for this "service"

SEPTEMBER 5, 2009 6:04 P.M.

Anonymous wrote:

This is a joke, more big corperate bull. Do they think we are all stupid? They over rent their network to get as much profit from it as possible. This begets lousy service then they expect us to swallow it like its a techincal limitaion of the of cell technology. They should apologize and be begging customers forgiveness not be trying to pull the wool over our eyes in a Utube video. In the end they should all be sued and forced to read a public statement of all the dirty tricks they pulled on the public, imagine if the laws made every company caught in shenanigans do this publically and name names. Screw Apple too for getting bed with these guys and forcing one carrier down your throat. I really think we are just a generation of stupids, putting up with all this corperate crap. Even in the video they dressed this guy to look like the perfect average joe yupie instead of a "suit" to try and appeal to us and make it look like its technical and the corperate side has nothing to do with it. Again, I want to see the CEO saying sorry its our fault and we will spend what ever it takes to give you good service and will not trade profit for quality at your expense.

SEPTEMBER 6, 2009 11:44 P.M.

Rr_baker wrote:

I am so tired of. Att i would gladly switch to another provider i may even give up my iphone to get away from att there is so much that this company has blocked customers from doing the final straw was a text message i received from att that stated eventhough i have unlimited data and free nationwide roaming I do not have free unlimited nationwide data roaming and it picked a great time to send me the message as i was using my iphone to demo att service with our product but when the audieance saw another att limit they told me to return when i had a deal with the other guys. Way to go Att

SEPTEMBER 7, 2009 9:23 A.M.

Mel wrote:

Once you make the ASSumption of blaming the messenger (ATT) not the crappy IPhone RF OS message.

Its not Atts fault or Apples alone. Its the combination of both, Apple developed an entire system based around constant communication between the tower and the phone. not lonly does this hog up more bandwidth. It single handedly caused my Blackberry bold to be drained of total battery life in half a day, i thought this was an issue with having to many iphones in the bay area. Thus swtitched to the Blackberry Curve 2, and then within a few weeks i am having the same issue between EDGE and GSRP. This constant switching is a result of not having enough bandwith from teh tower for data. Hence the constant switching of networks and cell towers causes these issues. Its ATT fault as much as Apples for its design issues with regard to network traffic.

OCTOBER 28, 2009 12:22 P.M.

Sammy wrote:

What will the sar emissions of the Iphone be if Apple makes a cdma version of it?

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.